A recent article in the Globe and Mail talked about the poor results from grants Ontario gave to universities to build out entrepreneurship programs. It’s the traditional gripes about university startup programs: too much money spent useless things (office space and 3D printers) or money spent on things that could be free (mentorship) and it’s too difficult to track outcomes.
This problem is everywhere. Entrepreneurship is seen by the public and by the government as A Good Thing That Should Be Encouraged. Money is made available to universities to promote entrepreneurship, usually through the creation of a entrepreneurship support group inside a business school or the university commercialisation body. They run business creation workshops for students, review business plans, hold pitching competitions, and maybe they have some sort subsidised office space or angel seed money for the very best kids.
And after 4 or 5 years of this, the results are tallied up and they don’t look good. There are a few academic spinouts, but but many of them might still be in the angel investment/VC investment phase with very little to show. If the entrepreneurship organisation is very good at record keeping, they might have a list of how many students they helped have gone on to start a new venture, but chances are also that these startups have low growth potential. So there’s a re-org, new management is brought in, a new mission statement crafted. Wash, rise and repeat.
The problem with many university entrepreneurship programs is that we are measuring the wrong things. It’s great if we embed entrepreneurship in the curriculum so much that students in all disciplines from STEM to Slavic Studies are prepared to identify a pain point and build a Minimal Viable Product while filling out their Business Model Canvas while watching a TED talk. But the fact is that recent university graduates are pretty poorly positioned to startup a growth-ready startup. Because they have little experience in any industry, they are poorly positioned to identify needs in industrial value chains or really anything beyond consumer products / apps. Studies have shown that the most successful entrepreneurs are generally in their late 30s/40s and have at least 10 years experience in the industry they’re entering. They have the knowledge, the legitimacy, and the resources necessary to successfully create a new, fast-growing venture.
In this sense, it’s kind of foolish for recently graduated students to jump into starting their own company the second they graduate. Some students who have been dreaming about running their own company for years will do this, and that’s great. They have the initiative, flexibility, and orientation needed to be a great entrepreneur.
But for most students, this entrepreneurship was never their goal after they graduate. For these students, the majority of a university’s student body, the point of entrepreneurship education is to plant a seed. Knowing that entrepreneurship is an option for them, knowing the fundamentals about what works in a startup and what doesn’t can help a graduate who is 8 or 10 years into their career in an industry see an opportunity and decide to take the risk of going after it. Now they not only have the skills to start a business they have the inside knowledge and experience that gives them an unfair advantage.
The problem is that these startups will never show up in any analysis of the university’s entrepreneurial performance. The connection is too long-term and too subtle to easily pick up. But I think these types of startups are the most important outcome of university entrepreneurship education programs. It’s just a shame that we’ll never be able to count them.
There’s no solution to this. All we can do is temper our expectations for what an immediate intervention can do. A single program with a 3-year rolling budget won’t make a university a startup factory. This kind of transformation is a decades long project involving long-term investments, changes to the way tenure and promotions work, and a complete reinvention of the university’s culture and the type of students it creates. But what these programs can do is help create a more entrepreneurial population of graduates, even if they don’t become entrepreneurs until long after they’ve graduates.